From CNN to "The McLaughlin
Group", one man's recent critique of capitalism has led
to a debate about the role of capitalism and its effects on
society. The argument has once again come down to whether
limits are needed on capitalism to stop it from wreaking
havoc on society.

The man in question who has largely sparked this latest round of
the pros vs. cons of capitalism is billionaire financier George Soros
with his piece in the February 1997 issue of The Atlantic Monthly
entitled "The Capitalist Threat".

While I must say at the outset of this
piece that I emphatically disagreed with Soros' arguments and
conclusions, he has performed a valuable service to
capitalism. Too long has capitalism been debated with too few
people understanding exactly what it is that they are
debating.

So What Is Capitalism?

Defining capitalism seems to be a difficult
proposition for most, even for some that should know. The
only economic system that most North Americans have
experienced is the mixed economy, a society that has
attempted to fold, and failed in trying, collectivist
precepts into a capitalist economy, spawning a mutation which
is sometimes as much one as the other.

As an example, not long ago I received a
piece of email from a young woman at Aquinas College. While
doing some research for a paper she stumbled on ESR
and posed the question she had been tasked to answer.
"Is the United States a socialist or capitalist
society?"

A good question. Living in Canada I could
only answer from an outsider's perspective. In Canada the
answer is only slightly easier to answer. The response I gave
her was, to be succinct, that the United States was both.

While the United States features less
government intervention in the economy (level of taxation,
government regulation of the market and level of
entitlements, among other variables should suffice to explain
government intervention) than does Canada and some European
states, it still features a huge bureaucracy which regulate
large segments of the economy. Since the late 1800's, the
United States has moved steadily away from a capitalist
economy to that of a mixed economy.

I myself prefer Ayn Rand's definition
of capitalism which appeared in her essay "What Is
Capitalism?" (Capitalism: The Unknown Ideal,
1967):

"Capitalism is a social system
based on the recognition of individual rights, including
property rights, in which all property is privately
owned."

Rand's definition is one that presupposes
knowledge about the basic aspects of objectivism, the
philosophy that she largely created and refined. Since this
is an essay on capitalism, I try and succinctly give you that
background.

Rand believed that the cornerstone of
capitalism was individual rights and that the only way to
protect those rights was to eliminate force in human
relationships. Rand believed that in a capitalist society
that force, whether, coercion or physical, may not be
initiated by one against another. To banish force, government
is given the monopoly of force to protect people's
rights.

If force is banished, then all human
exchange is voluntary and all exchange is governed by reason.

So what is the role of private property?
Rand stated in that same essay, "Private property is the
institution that protect and implements the right to disagree
 and thus keeps the road open to man's most
valuable attribute (valuable personally, socially, and objectively):
the creative mind."

The Capitalist Threat?

So what's George Soros' beef?

In his Atlantic Monthly piece Soros claims that capitalism
has become a force that is doing harm to society itself. After successfully
juxtaposing itself against Marxism, capitalists believe that the system
has become an ultimate truth. Like Marxism, Soros
states, capitalism is trying to portray itself as a science.

His core argument is that the "open
society" that we enjoy is being threatened. What Soros
means by the term "open society" is what
philosopher Karl Popper's definition the term is, which
appeared in his 1945 work, The Open Society and Its
Enemies. Popper stated that since the ultimate truth is
beyond mankind, ideologies like Marxism or Nazism, which
claim to be an ultimate truth, must rely on oppression to
force its truth on society and those who do not share the
same ultimate truth. Popper's view of a open society was
one that realized that there were many ultimate truths and
that government was needed to protect the rights of citizens,
allowing them to co-exist peacefully even though widely
divergent philosophies existed.

Soros believes that many capitalists have
accepted capitalism, and are promoting it as, an ultimate
truth without understanding the ramifications and effects. It
has become a force, that like totalitarian ideologies, which
believes it possesses an ultimate truth and destroys common
interests.

Soros believes that these common interests,
never really defined in his piece, must be protected from
capitalism. "Laissez-faire capitalism holds that the
common good is best served by the uninhibited pursuit of
self-interest. Unless it is tempered by the recognition of a
common good that ought to take precedence over particular
interests, our present system is liable to break down."

Soros also has a problem with what he calls
"excessive individualism". Soros defines that as
"too much competition and too little cooperation."
What does the amateur philosopher define individualism as? No
answer.

For all his successes and obvious talents,
I would submit that Soros does not understand on a
philosophical level what capitalism really is.

Soros believes that his "open
society" is threatened some people's belief that
capitalism has an ultimate truth, one that will infringe on
the beliefs and truths of others who do not share
capitalism's philosophical messages.

Soros is essentially correct. Some
"truths" disappear because they are destroyed by
the reality of the situation. But what Soros is arguing is
not anti-capitalism, what Soros is arguing is anti-reason.

Capitalism, as stated above, is a free
exchange, not only of goods and services, but of philosophies
as well. Just as a temporal marketplace deals in products, a
philosophy must gain currency in the marketplace of the
minds. The only moral way for a philosophy to be freely
exchanged is with reason.

Capitalism is a moral system that depends
on free exchange. Anyone is allowed to hold whatever beliefs
they wish, but those beliefs will be tested by reality. If
they do not hold up to reason, then a rational person will
re-think those beliefs. Capitalism too depends on reason.
That which cannot be rationally explained in a free market
cannot be sustained.

Capitalism serves no common good for
society. The common good is a term that has no definition.
Who's common good? No answer.

When Soros talks about the "common
good" he expressly holds that as a higher goal then the
individual. Soros railed against what he calls excessive
individualism. Soros all but admits his tyranny is
acceptable, where capitalism's benefits are not. His
tyranny holds the collective should benefit not those who
hold rationality and justice above the mob. Soros'
"common good" means upholding any belief system, no
matter what it preaches. By placing other systems at the same
level as capitalism Soros does not raise them, but insults
the freest form of human exchange.

Capitalism serves no social or collectivist
agenda. It is simply the most moral system of human exchange
and interaction conceived.

John McLaughlin called this debate
"faddist" but he is wrong. Capitalism has been
under attack since the day Wealth of Nations was
published. Attempts to subvert capitalism to shackle it to
someone's hobbyhorse or outright attempts to destroy it
happen every day, whether by "social activists" or
governments. To date, capitalism has survived in one mutated
form or another. George Soros' attack is merely the
latest.

Don't believe that Soros is arguing
anti-reason? His own words condemn him as an enemy of
capitalism, true freedom and the human mind:

"We have now had 200 years of
experience with the Age of Reason, and as reasonable
people we ought to recognize that reason has its
limitations. The time is ripe for developing a conceptual
framework based on our fallibility. Where reason has
failed, fallibility may yet succeed."

It would appear that Mr. Soros fell prey to his own conceptual framework.